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Does a non returnable deposit have to be protected?

housesHere is a question to the blog clinic from Chris who is a tenant

When I moved into my Property in 2008 my Landlord insisted that I pay one months rental payment to cover dilapidations at the end of the tenancy. This payment I was advised was non returnable and very foolishly I agreed to this stipulation.

I now understand that this payment may at best be questionable and that this payment should have been covered in a Tenancy Deposit Scheme. If I took him to court to retrieve this money (£480) would the Judge be likely to view this in favour of me or the Landlord ?

The essence of a deposit is that it is returnable. If a payment is not returnable it is not a deposit.  Ergo, it follows that it does not need protecting under the tenancy deposit rules.

It may be worth checking what your tenancy agreement says though.  It is possible that a clause saying the payment is non returnable could be void under the Unfair Terms in Consumer Contracts Regulations, but we would need to see the wording to check this.

The payment would probably count as a premium rather than a deposit.  My feeling is that if it was clearly a non returnable payment and you agreed to it, you are stuck with that now.

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If YOU have a problem, why not put it to the blog clinic?  However there are a lot of questions submitted, so if you need an answer quickly remember that members of my Landlord Law service can ask me questions in the members forum area, and will normally get an answer with 24 hours.



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About the post author:

Tessa Shepperson

Tessa is a lawyer specialising in residential landlord and tenant law. She runs the Landlord Law website (now in its 12th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google



The Landlord Law Blog from Tessa Shepperson

Tessa is an English lawyer specialising in residential landlord and tenant law.


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